The reorganization was necessitated by the Feb. 1 end of redevelopment agencies statewide to help patch the state’s budget hole. The state Supreme Court upheld the law dissolving the agencies but not the alternative that would have kept them going if they paid the state a guaranteed portion of their funds.

In San Diego city, there were 14 redevelopment project areas that received earmarked property taxes for improved streets and sidewalks, new parks and libraries, and affordable housing developments. Downtown also saw some megaprojects come into being because of redevelopment, including Horton Plaza shopping center in 1985, the San Diego Convention Center in 1989 and Petco Park in 2004.

Councilwoman Marti Emerald voted no, saying there should have been a plan for Civic San Diego to have a city-wide focus.

“I just don’t feel we have done enough to address everybody in the city of San Diego,” Emerald said.

Councilman David Alvarez voted in favor but commented, “We’re creating a new organization, titling it ‘Civic San Diego,’ and it should be about all of San Diego,” he said.

Mayoral aide David Graham explained that transferring other neighborhoods to Civic San Diego oversight requires conferring with city labor unions, since city employees currently handle those areas. Those negotiations are under way, but he did not indicate how long it will take to reach agreement.

As of July 1, under a plan proposed by Mayor Jerry Sanders, the Centre City Development Corp., which has overseen downtown revitalization since 1975, will become Civic San Diego.

The Southeastern Economic Development Corp., in existence since 1982 to improve neighborhoods southeast of downtown, will become a subsidiary.

Civic San Diego will operate under contract to the city with a $5.9 million budget and 32 employees for the fiscal year starting Sunday. In fiscal 2012, the budget was $9.9 million and staff for CCDC and SEDC totaled 58.

The employees are not city workers and are covered by their own salary and benefits schedules. However, the organization is bound by open-government state laws. Its nine-member board is appointed by the mayor and council to no more than two three-year terms.

Murtaza Baxamusa, representing the San Diego Building Trades Family Housing Corporation, said Civic San Diego’s creation lays the “foundation for a new era of redevelopment,” but said its CCDC predecessor failed to generate enough good jobs and affordable housing. (Note change in group Baxamusa represents.)

Mel Shapiro, a frequent critic of CCDC, said he thinks Civic San Diego was being created primarily to build a new Chargers stadium downtown.

However, downtown activists said Civic San Diego is needed to keep revitalization going and to serve as a model for the rest of the city.

“If you could make that expertise available to other parts of the city ... why wouldn’t you?” asked Joyce Summer, former chairwoman of the downtown community planning group.

Councilman Carl DeMaio, running for mayor against Rep. Bob Filner, D- San Diego, said Civic San Diego’s development approval powers, carried over from CCDC for downtown alone, have proven cost effective.

“I’d like to expand that to other parts of the city,” DeMaio said. “We’re creating a life raft to finish up projects and keep innovations working for these (downtown) neighborhoods and expand it.”